CTJ

Citizens forTax Justice

June 30, 2011

Contact: Steve Wamhoff(202) 299-1066 x33

U.S. Is One of the Least Taxed

Developed CountriesRevenue Increase the Obvious Answer to Deficit ImpasseSome members of Congress are threatening to allow the U.S. to default on its debt obligations and send financial markets into a tailspin unless the President agrees to large, sudden cutsin the budget deficit without any increase intax revenue. But the most recent data fromTotal 2009 Taxes as a % of GDPthe Organization for Economic CooperationD e nm a rkand Development (OECD), the Office ofS we de nManagement and Budget and the CensusBureau reveal that the U.S. is already one ofIt a lythe least taxed countries in the developedB e lgiumworld. Only two OECD countries have lowerF inla ndtaxes as a share of gross domestic productA us t ria(GDP) than the United States.F ra nc eN o rwa y

Overall, U.S. Taxes Are Third-Lowest Among

OECD Nations In 2009, total federal, state and local taxesin the United States were 22.6 percent of ourgross domestic product, ranking 26th amongthe 28 OECD countries for which data areavailable. Only Chile (18.2 percent) andMexico (17.5 percent) had lower taxes.

In 2009, total taxes in the 25 OECD nations

with higher taxes than ours ranged from 24.6percent of GDP in Turkey to 48.2 percent inDenmark.

C a na daN e w Z e a la ndS pa inS wit ze rla ndG re e c e

In most cases, the difference in tax levels

between the U.S. and OECD countries is noteven close. Of the 25 OECD nations withtaxes higher than ours, 22 of them have taxesthat are at least 25 percent higher, and 15have taxes at least 50 percent higher.

Corporate Income Taxes

Many corporate leaders have noted that other OECD countries have lowered their corporatetax rates in recent years, but fail to mention that these countries have also closed corporatetax loopholes while the U.S. has expanded them. As a result, the U.S. collects less corporatetaxes as a share of GDP than all but one ofthe 26 OECD countries for which data are2009 Corporate Income Taxes as a % of GDPavailable. In 1965, U.S. corporate income taxeswere 4.0 percent of our GDP, compared to2.3 percent of GDP in other OECDcountries.

N o rwa yLuxe m bo urgKo re aC ze c h R e public

But by 2009, U.S. corporate taxes had

fallen to only 1.3 percent of our GDP, whilecorporate income taxes of the other OECDnations collectively stood at 2.4 percent.

S wit ze rla ndN e w Z e a la ndIt a lyS we de nS lo v a k R e public

Many countries experienced unusually

low corporate tax receipts in the last coupleyears due to the recession. But even whenU.S. corporate taxes recently peaked in2007 at 3.2 percent of GDP, the average forthe other OECD nations was well ahead, at3.8 percent of GDP.

In 2009, only Iceland had lower corporate

Corporate Income Taxes as a % of GDP

A us t riaF ra nc e

4.5%

G e rm a ny4.0%

Unit e d S t a t e s3.5%

Ic e la nd3.0%

2.5%2.0%1.5%1.0%

Other OECD Countries

0.5%

US

2009

2007

2005

2003

2001

1995

1985

1975

1965

2.0%

4.0%

6.0%

8.0%

Personal Income Taxes

In 2000, the year before President George W. Bush took office, personal income taxes were12.3 percent of our GDP. Since the Bush tax cuts were enacted, personal income taxes have plummeted. Even withthe brief economic bubble that caused income tax receipts to rise in 2007, personal incometaxes were consistently well below their 2000 level as a share of GDP ever since the Bush taxcuts were enacted. In 2009, U.S. personal income taxes were just 7.7 percent of GDP.Social Insurance Taxes Social insurance taxes and other wage taxes have risen rapidly worldwide. Since 1965, social insurance taxes in the U.S. have risen from 3.2 percent of GDP to 6.2percent of GDP in 2009. In other OECD countries, social insurance and other wage taxes rose from 6.1 percent ofGDP to 10.8 percent over the same period.Sales, Excise and Other Consumption Taxes In 1965, total federal, state and local consumption taxes in the U.S. were 5.5 percent ofGDP. By 2009 they were 4.1 percent. In other OECD countries, consumption taxes were 9.6 percent of GDP in 1965, and 9.1percent in 2009.Property & Wealth Taxes Property and wealth taxes in the U.S. (about 90 percent of which are state and local realestate taxes) fell from 3.9 percent of GDP in 1965 to 2.9 percent in 1980, and have held stablethereafter. They were 3.2 percent of GDP in 2009.

Taxes as Shares of GDP in the United States and Other OECD Countries, 1965-2009 (federal, state & local)

19651970197519801985199019952000200120022003200420052006200720082009

19651970197519801985199019952000200120022003200420052006200720082009

Total taxes/GDPAll but USUSUS-rank27.2%24.3% 16 of 2428.4%27.3% 14 of 2429.8%26.6% 16 of 2532.2%26.8% 17 of 2632.7%25.8% 20 of 2633.7%26.0% 22 of 2733.1%26.5% 28 of 3233.6%29.0% 28 of 3333.6%28.0% 28 of 3333.2%25.8% 29 of 3333.4%24.4% 30 of 3333.6%24.3% 29 of 3334.1%25.9% 29 of 3334.6%26.9% 29 of 3334.9%27.3% 29 of 3334.7%25.9% 30 of 3335.5%22.6% 26 of 28Soc. insur. & payroll taxes/GDPAll but USUSUS-rank6.1%3.2% 15 of 246.9%4.4% 13 of 248.6%5.4% 16 of 259.4%5.9% 15 of 269.5%6.5% 15 of 269.7%6.5% 15 of 2710.3%6.6% 20 of 329.8%6.7% 21 of 3310.0%6.9% 21 of 339.9%6.7% 21 of 3310.1%6.6% 21 of 3310.1%6.3% 22 of 3310.0%6.5% 22 of 339.9%6.4% 22 of 339.9%6.3% 22 of 3310.3%6.3% 22 of 3310.8%6.2% 18 of 28

All Income taxes/GDP

All but USUSUS-rank8.8%11.7%6 of 249.8%13.6%7 of 2410.7%12.1%12 of 2511.6%13.4%11 of 2611.9%11.7%16 of 2612.6%11.9%16 of 2711.1%12.2%14 of 3211.6%14.8%10 of 3311.4%13.9%15 of 3310.7%11.3%16 of 3310.6%10.4%17 of 3310.9%10.5%17 of 3311.4%11.8%16 of 3311.9%12.8%14 of 3312.2%13.4%12 of 3311.9%12.1%15 of 3310.6%9.0%19 of 29Consumption taxes/GDPAll but USUSUS-rank9.6%5.5%23 of 249.2%5.5%21 of 248.2%5.2%22 of 258.8%4.7%23 of 268.7%4.9%24 of 268.6%4.7%25 of 278.7%4.8%31 of 329.2%4.7%33 of 339.3%4.6%33 of 339.4%4.5%33 of 339.5%4.5%33 of 339.5%4.5%33 of 339.6%4.6%33 of 339.6%4.6%33 of 339.6%4.4%33 of 339.5%4.4%33 of 339.1%4.1%29 of 29

Personal income taxes/GDP

All but USUSUS-rank6.5%7.7%9 of 247.1%10.0%8 of 248.2%9.2% 13 of 259.0%10.5% 11 of 258.7%9.8% 12 of 259.2%9.9% 14 of 258.3%9.6% 16 of 308.4%12.3%8 of 318.6%11.8%9 of 318.1%9.8% 15 of 318.0%8.8% 15 of 318.0%8.5% 14 of 318.2%9.2% 14 of 318.4%9.7% 12 of 318.7%10.3% 11 of 318.7%9.6% 13 of 318.5%7.7% 15 of 26Property & wealth taxes/GDPAll but USUSUS-rank2.1%3.9%2 of 242.0%3.9%3 of 241.8%3.7%2 of 251.8%2.9%2 of 262.1%2.8%3 of 262.1%2.9%3 of 272.4%2.9%6 of 322.4%2.8%8 of 332.3%2.9%7 of 332.3%3.0%5 of 332.4%3.0%5 of 332.4%3.0%5 of 332.4%3.0%7 of 332.4%3.0%8 of 332.4%3.1%7 of 332.2%3.1%6 of 332.4%3.2%4 of 28

Corporate income taxes/GDP

All but USUSUS-rank2.3%4.0%2 of 242.7%3.6%5 of 242.5%2.9%7 of 252.9%2.9%7 of 253.4%1.9% 13 of 253.6%2.0% 15 of 252.9%2.6% 15 of 303.4%2.5% 24 of 313.1%2.1% 26 of 312.9%1.5% 29 of 312.9%1.6% 29 of 313.1%2.0% 27 of 313.4%2.6% 23 of 313.8%3.1% 19 of 313.8%3.2% 21 of 313.4%2.5% 25 of 312.4%1.3% 25 of 26

Taxes by Type as Shares of Total Tax Receipts in the United States and Other OECD Countries, 1965-2009

19651970197519801985199019952000200120022003200420052006200720082009

19651970197519801985199019952000200120022003200420052006200720082009

Soc. insur. & payroll taxes/total

All but USUSUS-rank23.8%13.3% 14 of 2425.4%16.1% 12 of 2429.8%20.5% 14 of 2529.0%21.9% 15 of 2629.1%25.2% 12 of 2628.7%25.1% 15 of 2731.2%24.7% 19 of 3229.0%23.0% 20 of 3329.6%24.5% 20 of 3330.0%26.0% 19 of 3330.3%26.9% 18 of 3330.0%26.0% 19 of 3329.3%24.9% 19 of 3328.6%23.8% 19 of 3328.2%23.3% 20 of 3329.6%24.3% 20 of 3330.3%27.6% 14 of 28

All income taxes/total taxes

All but USUSUS-rank32.4%48.1%4 of 2434.7%49.8%5 of 2435.8%46.0%7 of 2536.1%49.8%5 of 2636.5%45.4%6 of 2637.5%45.8%7 of 2733.6%46.1%5 of 3234.4%51.1%4 of 3333.7%49.7%4 of 3332.4%43.9%5 of 3331.8%42.6%8 of 3332.4%43.1%7 of 3333.4%45.5%6 of 3334.4%47.8%6 of 3335.0%49.2%4 of 3334.2%46.6%8 of 3337.7%40.0%7 of 28Consumption taxes/totalAll but USUSUS-rank35.3%22.8%24 of 2432.4%20.0%24 of 2427.6%19.5%24 of 2527.3%17.6%25 of 2626.6%18.8%25 of 2625.6%17.9%26 of 2726.4%18.3%31 of 3227.4%16.2%33 of 3327.6%16.4%33 of 3328.3%17.5%33 of 3328.4%18.5%33 of 3328.4%18.6%33 of 3328.1%17.8%33 of 3327.6%17.0%33 of 3327.5%16.2%33 of 3327.4%17.0%33 of 3328 of 2832.2%18.0%

Personal income taxes/total

All but USUSUS-rank23.8%31.7% 9 of 2425.0%36.6% 6 of 2427.6%34.6% 8 of 2526.7%39.1% 6 of 2525.7%37.8% 6 of 2526.6%38.0% 7 of 2524.5%36.4% 5 of 3023.9%42.4% 3 of 3124.2%42.3% 3 of 3123.4%38.2% 5 of 3123.0%36.1% 5 of 3122.8%35.1% 5 of 3123.1%35.4% 6 of 3123.2%36.1% 4 of 3123.8%37.6% 3 of 3123.9%36.9% 5 of 3128.4%34.3% 5 of 25Property & wealth taxes/totalAll but USUSUS-rank7.9%15.9% 1 of 247.1%14.2% 1 of 246.2%13.9% 1 of 255.7%10.7% 2 of 266.4%10.7% 2 of 266.2%11.2% 2 of 277.3%10.9% 3 of 327.0%9.7% 5 of 336.9%10.2% 4 of 337.0%11.7% 3 of 337.1%12.2% 1 of 337.0%12.2% 1 of 336.9%11.7% 3 of 337.0%11.3% 3 of 336.8%11.3% 3 of 336.4%12.1% 1 of 338.3%14.4% 1 of 27

Corporate income taxes/total

All but USUSUS-rank8.6%16.4% 3 of 249.6%13.2% 5 of 248.3%11.4% 6 of 258.7%10.8% 7 of 2510.1%7.5% 11 of 2510.4%7.8% 10 of 258.6%9.6% 7 of 309.6%8.7% 18 of 318.7%7.4% 21 of 318.3%5.7% 26 of 318.2%6.5% 22 of 318.9%8.0% 19 of 319.6%10.1% 13 of 3110.4%11.7% 10 of 3110.3%11.6% 10 of 319.4%9.7% 14 of 318.0%5.8% 17 of 25

Notes: Annual totals for non-U.S. OECD are weighted by GDP.

U.S. annual rankings compared to all countries include all countries with tax information for the year ranked.U.S. federal, state & local taxes shown here are on a cash-flow basis (as reported by the Office of Management and Budget and the Census Bureau).Federal personal income taxes are net of refundabale tax credits.